REDWOOD CITY—The company behind a massive housing development proposed here along San Francisco Bay plans to adjust its pitch in coming months, partly in response to concerns raised by local groups.

The land at stake, owned by Cargill Inc., has been used for the past century to produce salt. The company and developer DMB Associates Inc. now want to transform half of the 1,400-acre salt works into a 12,000-unit housing development, with schools and offices, while restoring half of the land as tidal marsh, recreational areas and other open space.

The project, which would boost Redwood City's population an estimated 30% from about 76,000 now, has drawn opposition from environmental groups and some officials in the region concerned about the scope and environmental impact of the project.

"Building anything of this scale on this site is so out of bounds, so out of step with the last 50 years of the bay's history, that the conversation shouldn't even need to go past that," said Davis Lewis, executive director of Save the Bay.

In an early step in the long road to final approval for the project, Redwood City recently ended a five-month comment period on the scope of an environmental-impact study of the proposal.

Now, DMB is preparing to update the plan, initially released in May 2009, to address some of the thoughts residents and groups offered during the comment period and in private conversations.

"There are a number of suggestions that we actually think are very thoughtful and that we'll integrate into the proposal," said Eneas Kane, chief executive of DMB, a Scottsdale, Ariz., company that has developed large communities in Arizona and elsewhere in California.

A big complaint about the initial proposal was its plan to import water to the development from the Central Valley, because Redwood City doesn't have enough water for all the new residents. Organizations such as Save the Bay protested that would further deplete water from the already parched Central Valley.

Now, DMB plans to look again at other options, including desalinized water and groundwater sucked from nearby, though the company says it still believes the Central Valley plan works best and would use surplus water, according to David Smith, a senior vice president at DMB.

Other modifications, which DMB says it plans to submit to Redwood City as early as this summer, include changing the configuration of some of the land to help ease persistent flooding.

The revised plan also would add a high school to go with four elementary schools and one middle school, after the school district worried it wouldn't have space to accommodate an influx of children. School district officials didn't immediately return phone calls requesting comment. The developer may share in some of the costs associated with the schools, DMB's Mr. Smith said

The proposal is still far from reality. Assuming DMB and Cargill clear the numerous regulatory, legal and public-opinion hurdles, it could be three decades before the development is finished, said Blake Lyon, the senior planner managing the approval process in Redwood City's planning department. Mr. Smith said some residents could move in within years of the project getting clearance from all the appropriate groups. The city has remained neutral on the project.

Meanwhile, local groups including Save the Bay say they will likely continue to oppose the plan no matter how the details change. Save the Bay says Cargill should sell the land to the government so all of it can be restored, said Mr. Lewis, executive director of the group.

Mr. Kane countered that the federal government earlier declined to buy the property at Cargill's asking price and that DMB's restoration plans for half the site would likely be better than what the cash-strapped government could achieve.

Other opponents of the plan include regional branches of environmental groups such as the National Audubon Society along with the former mayors of neighboring towns including Palo Alto and Mountain View.

Cargill's push to turn its salt works into a housing development underscores the shift in the Bay Area economy over the past century. The region once was home to a robust salt industry because its sunny and windy climate is conducive to salt production. But because of shrinking regional demand and increased competition from salt-making rivals, executives decided to seek other ideas for the site in Redwood City. When the federal government declined to buy the land, Cargill executives decided to partner with DMB to develop it instead.